Oregon laws can catch up to protect customers.

Customers in southeast Portland recently found out that hydrogen may be sneaking its way into their homes. NW Natural, Oregon's largest gas utility, has started injecting hydrogen, blended with so-called "natural gas," into its distribution lines without informing customers or regulators.

Hydrogen is a bad bet for decarbonizing homes pretty much any way you look at it. It's far more expensive than electrification, can't achieve nearly the same climate impact, and can be dangerous, as Sightline has written about extensively. Plus, since carbon-free green hydrogen is in short supply and is electricity-intensive to produce, policymakers would be smart to save it for the hardest-to-decarbonize sectors, like heavy industry.

But gas utilities across Cascadia are pushing hydrogen for use in homes and businesses, and lawmakers and regulators have yet to catch up. Oregon, home to Cascadia's first hydrogen-blending pilot, has no laws to protect consumers and communities from ineffective, unsafe, and inefficient use of the fuel.

And Oregon is not alone in the region; Alaska, Idaho, and Montana all lack legal oversight of hydrogen blending, although no projects of this type are yet underway in these states. (British Columbia statute permits gas utilities to replace some of its natural gas with hydrogen, subject to price and quantity caps.) Washington State is the only jurisdiction in Cascadia with some safeguards for consumers, communities, and the electric grid around utilities' use of hydrogen. Policymakers in Oregon and Cascadia writ large can build from Washington's policy to protect customers and ensure that gas utilities aren't throwing good money after bad.

Cascadia's first hydrogen blending project is underway

All Cascadian gas utilities promote hydrogen as a pivotal part of their decarbonization plans. Hydrogen and biomethane feature prominently in NW Natural's 2022 integrated resource plan (IRP). Oregon regulators recently rejected this plan, partly because its long-range assumptions about hydrogen "skew optimistic" and do not present an "objective view of the significant risks and uncertainties" of the fuel. In fact, the Oregon Public Utilities Commission (PUC) rejected all three of the state's gas utilities' plans to decarbonize with hydrogen due in part to high cost and overly optimistic forecasts for growth of a hydrogen economy.

But this regulatory setback didn't stop NW Natural from moving ahead with the fuel. "Hydrogen is a key piece of our plan to reach our goal of delivering carbon neutral energy by 2050," NW Natural boasts on its website. In May 2024, the utility started delivering hydrogen to homes and businesses in the Portland area without formal notice to regulators or customers. The pilot is displacing just 0.2 percent of summer gas volumes and 0.003 percent of winter gas volumes.

Cascadia's gas utilities have promoted so-called green hydrogen, made from renewable electricity-powered electrolyzers that split water into hydrogen and oxygen. (See Sightline's primer on the different types of hydrogen.) But NW Natural isn't even piloting green hydrogen; it is blending turquoise hydrogen into its system, which it produces at its Central Portland facility. To create turquoise hydrogen, natural gas is heated to high temperatures and converted to hydrogen and solid carbon - a process known as pyrolysis. Climate-warming pollution is emitted throughout the process: methane leaks during fracking and delivery, and fossil fuels may be burned to generate heat for pyrolysis.

Even if NW Natural were using green hydrogen, its pilot would skim less than 0.07 percent of carbon emissions from NW Natural's gas system. And if NW Natural scales its hydrogen operations to displace 20 percent of its gas blend (a hundredfold increase from the pilot and the maximum possible blend amount in existing pipelines), it would still reduce its carbon emissions by at most 7 percent.

Oregon lawmakers ...